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Crisis Management in Organizations: an Exploratory Study of Factors That Louisiana State University LSU Digital Commons LSU Doctoral Dissertations Graduate School 2011 Crisis management in organizations: an exploratory study of factors that affect strategy formation and selection Tulika Sinha Louisiana State University and Agricultural and Mechanical College Follow this and additional works at: https://digitalcommons.lsu.edu/gradschool_dissertations Part of the Mass Communication Commons Recommended Citation Sinha, Tulika, "Crisis management in organizations: an exploratory study of factors that affect strategy formation and selection" (2011). LSU Doctoral Dissertations. 2843. https://digitalcommons.lsu.edu/gradschool_dissertations/2843 This Dissertation is brought to you for free and open access by the Graduate School at LSU Digital Commons. It has been accepted for inclusion in LSU Doctoral Dissertations by an authorized graduate school editor of LSU Digital Commons. For more information, please [email protected]. CRISIS MANAGEMENT IN ORGANIZATIONS: AN EXPLORATORY STUDY OF FACTORS THAT AFFECT STRATEGY FORMATION AND SELECTION A Dissertation Submitted to the Graduate Faculty of the Louisiana State University and Agricultural and Mechanical College In partial fulfillment of the requirements for the degree of Doctor of Philosophy in The Manship School of Mass Communication by Tulika Sinha B.Sc., Delhi University, 1995 M.S., Ohio University, 2005 August 2011 DEDICATION To my parents, Rita and Arun; my son, Jyotiraditya; and my sister, Sonali without whose boundless patience, support, understanding, and love this dissertation would have been impossible to complete. I love you. ii ACKNOWLEDGEMENTS This dissertation project is the culmination of the efforts of several people. I would like to acknowledge and thank them for their contribution to this project. First and foremost, I would like to convey my heartfelt thanks and gratitude to my committee members, Dr. Margaret DeFleur, Dr. Danny Shipka, Dr. Jinx Broussard, Dr. Thomas Greckhamer, and Dr. Loretta Pecchioni. Dr. Margaret DeFleur has been like a mother figure to me at LSU. Her office doors has always been open for me. Whenever I had an issue, (and I had quite a few!) I would run to her, and however busy she might have been, she would always find time for my problems and me. I am ever so indebted to her. Dr. Shipka has been a great mentor to me. His positive energy and words of encouragement kept me focused on my dissertation. He has always been available to answer all my questions and concerns. Thank you. Dr. Jinx Broussard’s public relations classes have been a constant source of inspiration for me and I am sure this is true of all her students who have had an opportunity to take classes with her. She has a wonderful way of connecting theoretical concepts to practical situations, which has animated all our discussions in class. More importantly, she was there with her wise suggestions when I was looking for people to interview for this dissertation. Her help has been invaluable in completing this dissertation. I greatly appreciate all your help. Dr. Thomas Greckhamer’s strategic management class served as the foundation for this dissertation. I have had several good discussions with him and his insights have helped me in refining my hypotheses. I especially value his suggestion in determining an acceptable sample size. I am very grateful to you for all your help. iii Dr. Loretta Pecchioni has been wonderfully supportive of my academic endeavors at LSU. She very generously agreed to let me do an independent study under her in health communication campaigns. I have learned a lot from her. She is a very kind and generous person and anyone who has met her would attest to that. When the Graduate School had difficulty finding a Dean’s representative for my committee, as it was the end of spring semester and beginning of summer, Dr. Pecchioni magnificently stepped in. She did not know, of course, whose committee she was going to serve on. This speaks volumes about her and I greatly admire her. Mr. Dan Borne’ has been my gateway to the chemical world. He assisted me in my data collection efforts and was available to answer my questions regarding the crisis in chemical industry. He very kindly agreed to do an interview with me. Thank you. My heartfelt thanks are also due to Mr. Paul Dauphin and Dr. Cleo Allen for doing interviews for this study. Mr. Paul Dauphin was on his way back from Houston to New Orleans when he stopped to do an interview with me. Dr. Cleo Allen did a phone interview as I had moved out of Baton Rouge. I really appreciate their help in this dissertation study. I greatly appreciate the support and help of my friends Yasmin, Khaleed, Suping and Masudul. Thank you all so much. Having them around greatly enriched my experience at LSU. Thanks are also due to Elizabeth Cadarette and Lynn LeJeune for always having a smile and promptly attending to all my requests. Thanks for doing such a great job at Manship. Finally, this dissertation would not be complete without acknowledging the unconditional support and love of my uncle and aunt, Sudhir and Mamta, whose house in Metairie, La. I call home. Thank you for everything. I love you both. iv TABLE OF CONTENTS DEDICATION………………………………………………………………………………….....ii ACKNOWLEDGEMENTS………………………………………………………………..……..iii LIST OF TABLES………………………………………………………………………..……...vii LIST OF FIGURES……………………………………………………………….…………….viii ABSTRACT……………………………………………………………………………………...ix CHAPTER 1 INTRODUCTION ……………………………………………………………………….….1 Brief Overview of Strategy within Strategic Management ...…………………………… 3 Brief Overview of Strategy within Public Relations……………….……………………10 Brief Overview of the Chemical Industry ..……………….…………………………..…13 Brief Overview of Organizational Crisis ……………………………………………..…16 Significance of the Study……………………………………..………………………….18 2 THEORETICAL FRAMEWORKS………………………………………………………...19 Situational Crisis Communication Theory……………………………….……………....19 Stakeholder Theory of the Firm…………………………………..……..…………….…22 Strategy…………………………………………………………………………………..26 Strategic Decision-Making Perspectives………………...…………..…………………..27 3 LITERATURE REVIEW…………………………………………………………………..42 Form Crisis Communication…………..…………………………………………………42 Content Crisis Communication…………………………………………………..………44 Corporate Impression Management…………………………………………..………….46 Image Restoration Theory….………………………………………………………..…...47 Crisis Typologies within Strategic Management………..……………………….………48 Hypotheses………………………………..……………………………..……………….50 4 METHODOLOGY………………………………………………………………………....68 Sampling…………………………………………………………………………………70 Limitations of Purposive Sampling………………………………………….…………..73 Sample Size……………………………………….……………………………………..74 Reliability and Validity Measures ………………………………………………….…...75 Survey Instrument……………………………………………………………………….76 Multiple Regression Analysis……………………………..……….…………………….78 In-depth Interviews…………………………..……………………….………………….82 Qualitative Data Analysis…………………………………………..……………………83 5 RESULTS ………………….…………………….…….…………..……………………...85 Results of Regression Analyses….…………….…………………………………......….85 Results of Qualitative Analyses…………………………………………………..……103 v Set of Best Practices…………………………………………………………….…...…123 6 DISCUSSION AND CONCLUSION....…………...….………………………………....137 Key Findings………………………..…………………..............................................................137 Limitations and Direction for Future Research………………………………………….….…...146 REFERENCES…………………………………………………………………………………149 APPENDIX A SURVEY QUESTIONNAIRE………………………………………………………………160 B OPERATIONALIZATION OF CONSTRUCTS………………………………….. ……….171 C WHEEL OF CRISES………………………………………………………………...………173 D. TYPOLOGY OF CRISIS…………………………………………………………………...174 E. CONSENT FORM ………………………………………………………………………….176 F. INTERVIEW TRANSCRIPT-DAN BORNE'………………………………………………177 VITA……………………………………………………………………………………………187 vi LIST OF TABLES 2.1 SCCT Crisis Typology by Crisis Clusters.. …………………………………………………20 2.2 SCCT Crisis Response Strategies………….……………………………………………..….21 2.3 Differences between the Synoptic and Incremental Strategic Decision-Making Process..….28 4.1 Descriptive Analysis of Variables Predicting Strategic Decision.…….………………….…86 4.2 Summary of Regression Analysis of Factors that Predict the Nature of the Crisis.…………90 4.3 Summary of Regression Analysis of Factors that Predict Strategy Formation during a Crisis…………………………………………………………………………………………93 4.4 Summary of Regression Analysis of Factors that Predict Strategy Selection during a Crisis……………………………………………………………………………………….. 98 4.5 Complete List of Hypotheses and the Support they Received ………….….……………..104 vii LIST OF FIGURES 1. Organizational Crisis Decision-Making Model..……………………………………….129 viii ABSTRACT This study investigated factors that influence the strategic decision-making process, specifically, strategy formation and selection during a crisis. It accomplished this by integrating theoretical concepts from both strategic management and crisis communication literature. Key organizational, environmental, and management factors--comprehensiveness, formalization, uncertainty, politicization, external corporate environment, crisis responsibility, impact of the crisis, stakeholder interests, and top management characteristics --were tested for their role in the strategy formation and selection process using regression analysis. This study used both quantitative and qualitative research methods. The quantitative aspect of the research involved conducting online surveys of senior management within the chemical industry and the qualitative phase of the project
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